One of the constant refrains heard from corporate officials in the United States is that the free market should decide which businesses succeed and which fail. An interesting theory but the market in the United States is anything but free. There are the governmental regulations that businesses decry but they protect the interests and health of the citizens. There are also massive subsidies and tax breaks for corporations. How can the “marketplace decide” if some companies are protected against failure by the U.S. Government. The banks that were too big to fail in the recent economic crash come to mind.
The nuclear industry has laws that limit the liability of nuclear power companies for costs associated with a major accident. They also receive loan guarantees from the Federal Government to build new reactors. There are even laws in some states that permit utilities to raise electricity rates for money to build new reactors. They may be allowed to keep the money even if the new reactors never get built. As far as the marketplace goes, several reactors are being shut down and other may not be built in the United States because they cannot compete on price with other sources of electricity. If power generation were allowed to exist in the free market, that would be the end of nuclear power generation.
The U.S. Nuclear Regulatory Commission has regulations that say that any operator of a nuclear reactor in the United States must be “financially qualified” to operate and maintain said reactor safely. The reason for this regulation is the fear that if a company is not able to make a profit from an operation reactor, they may be tempted to reduce funding for things like repairs, monitors, emergency backup systems, staff training, etc. And, if a company does in fact do any of these things, the odds of a major accident at their reactor will increase.
Entergy is a company which is involved in electrical energy generation and retail distribution. They began expanding into nuclear power generation in 1998 and currently own and operate twelve reactors in eight states. I have dealt with some of the Entergy reactors in previous posts. There have been shutdowns caused by equipment problems and reports of numerous NRC regulatory violations at Entergy reactors. Recently, their Palisades reactor was shut down because of radioactive water leaking into Lake Michigan. A recent column in the Motley Fool website suggests that Entergy is not looking like a good investment.
Recently, a report from Union Bank of Switzerland, a financial services company, states that Entergy is operating two of its plants at a loss and may also be losing money on a third power plant. The two plants that are losing money are the James A FitzPatrick plant in Oswego, New York and the Vermont Yankee plant in Vernon, Vermont. The plant that may be losing money is the Pilgrim reactor in Plymouth, Massachusetts.
The Citizens Awareness Network (Massachusetts, Vermont, and New York), Alliance for a Green Economy (New York), Pilgrim Watch (Massachusetts), and Vermont Citizens Action Network (Vermont) have file a joint petition seeking to have the NRC enforce the regulation about financial qualification against Entergy. The petitioners mention a series of equipment failures and emergency shutdowns at the three plants and raise the question of whether the financial problems of Entergy are causing the company to cut outlays for equipment repairs and replacements.
This is a perfect example of an issue I raised in a previous post. If Entergy should fail as a company and be unable to fulfill its obligation to deal with its reactors and their waste, who will pick up the cost? In the soft energy market of today, other utilities may be reluctant to buy nuclear plants which have been having serious and expensive problems. If those plants cannot be sold, then the U.S. taxpayer will have to bear the cost of either repairs or retirement and disposal of the fuel. These costs would run into the billions.
